Forty per cent of student bursaries are being allocated on the basis of criteria unrelated to financial need, according to new research.
In a lecture this week, "Changing Student Finances: Winners and Losers", Claire Callender, professor of higher education at Birkbeck, University of London, said that universities' student funding policies could be contradicting the Government's stated aim of widening participation by students from lower socioeconomic groups.
Her analysis of the bursaries offered to students by universities suggests that the system could be introducing new inequalities, she told Times Higher Education.
According to the Office for Fair Access, universities spend £96 million a year on non-repayable bursaries for students, equivalent to 21 per cent of the income they receive from students' top-up tuition fees.
Many of the bursaries being allocated by universities on non-needs-based criteria are being awarded on academic merit, found Professor Callender, who has previously advised the Government on student financial support.
"Research in the US shows that the key beneficiaries of aid that is allocated on merit are students from middle-income and higher-income families, who do not need additional student support," she said.
"The role of student finance is changing. Student finance is not only about access. Today it is being used as a competitive tool in student recruitment. Rather than eliminating (the impact of tuition) price, bursaries are being used by universities as a marketing tool."
Wes Streeting, vice-president (education) at the National Union of Students, said that the research "should be the final nail in the coffin for the current bursaries system".
He said that the NUS wants a national bursary scheme "to ensure fairness and transparency in student support, as well as to prevent marketisation through the back door. Financial support should be based on financial need."
Professor Callender also argued that increasing elements of privatisation are creeping into higher education. She said that this trend was epitomised by the Government's decision to cut funding to students studying for equivalent or lower-level qualifications.
"This is the full logic of what a private system looks like. There is no government funding and students and their families have to bear the total cost of their education ... Unless people are studying subjects that fit in with the skills agenda ... (they) are deemed by the Government not to be worthy of support. What does that say about the arts? What does that say about fundamental humanities subjects?"
Part-time students are being treated inequitably, Professor Callender said. "Only 23 per cent of part-time students get any help from the state, and that financial help is inadequate to meet either their tuition costs or their costs of study.
"The Government's unwillingness to help support part-time students is based primarily on the assumption that they can afford it, or that the study that they are doing isn't really serious, or that their employers are helping them.
"Yet we know that only a minority of students get help from their employers and those that do tend to come from higher paying jobs. Those that need it the most are not getting the help they need."